IV:Crude oil futures slide lower after Saudi comments, Fed ahead
Investing.com - Crude oil futures were lower on Monday, as comments by Saudi Prince Alwaleed bin Talal weighed on prices, while investors eyed the Federal Reserve's upcoming policy statement for indications on the future of the central bank's stimulus program.
On the New York Mercantile Exchange, light sweet crude futures for delivery in September traded at USD104.07 a barrel during European morning trade, down 0.61%.
The September contract settled down 0.75%, at USD104.13 a barrel on Wednesday.
Oil prices came under pressure after Alwaleed bin Talal said there is a "clear and increasing decline" in demand for crude oil from members of the Organization of Petroleum Exporting Countries, particularly Saudi Arabia.
In an open letter to Saudi Oil Minister Ali Al-Naimi, Prince Alwaleed bin Talal added that the kingdom won't be able to raise production capacity to 15 million barrels of crude a day as planned.
Saudi Arabia accounts for 12.9% of global oil production.
Meanwhile, investors remained cautious as string of mixed U.S. economic reports last week fuelled further uncertainty over whether the Fed will soon begin to scale back its bond-buying program.
On Friday, the University of Michigan said its index of consumer sentiment ticked up to 85.1 in July from a reading of 83.9 the previous month, beating expectations for a rise to 84.0.
The data came a day after the Labor Department said the number of individuals filing for initial jobless benefits the previous week increased by 7,000 to a seasonally adjusted 343,000, compared to expectations for an increase of 6,000 to 340,000.
The Fed’s stimulus program is viewed by many investors as a key driver in boosting the price of commodities as it tends to depress the value of the dollar.
The U.S. is the world’s biggest oil-consuming country, responsible for almost 22% of global oil demand.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for September delivery fell 0.44% to trade at USD106.70 a barrel, with the spread between the Brent and crude contracts standing at USD2.63 a barrel.
